Comments on: Why America’s small businesses are becoming like banks

By: CindyLee2262

CindyLee2262 — Tue, 11 Dec 2012 04:16:40 +0000

As a small business owner I live with unbelievable a/r ‘delays’ from Fortune 500 companies every day! I am appalled at the lack of honorable and ethical business practices. We are dealing with corporations that owe our small family business in excess of $50k for over 120 days-this past month I have heard everything from our computers are down, our check office was destroyed in Hurricane Sandy (funny, the checks seem to becoming from Quebec), we are going from public to private (yet you were able to borrow nearly $400 million), we lost your invoice (funny, that was used at the 60 day mark)…. Meanwhile, I can’t go ANYWHERE for money – my vendors won’t deliver if I am one day over due, my bank won’t cash checks if I am a penny short, and Uncle Sam requires me to remit payroll taxes every single week….but, my Fortune 500 customers are now using a competitor of mine – oh, when they do pay – they will ask for discounts, or ask for adjustments to rush thru a payment! And deduct the “overnight mail” fee. I am especially frustrated this year cause this little business may just fall over cliff – neigh…..we may jump!
All I want for Christmas is for you big guys to pay your bills! Oh, and a rubber stamp that my father in law (now deceased) used to stamp across over due invoices
PLEASE PAY US
SO WE CAN PAY THEM
AND THEY WILL PAY YOU

By: businessdoctor

businessdoctor — Wed, 17 Nov 2010 20:29:48 +0000

Our own and many client company experiences over the past 18 months validate this article’s point about significant unilateral extended payment practices by larger companies, universities and government agencies.

Talk about a failure to support emerging, small and medium size enterprises and putting a squeeze on small business cash flow – this has truly had a severe direct negative impact on local economies. This surely is not the desired American way.

Moreover, we see companies trying to drastically cut vendor’s prices and hear of employers overworking their people.

Unfortunately these negative factors along with customers’ delaying or cancelling work projects are a negative ‘multiplier’ that combine to delay recovery prospects by perhaps years.

More, Adam Smith’s notion of pursuing ‘self interest’ as a positive characteristic of western capitalism is not applicable within the context of such declining, broken economic model – in fact, self interest in this business environment damages the common good.

Now more than ever #B2B #networks will have to #reinvent and #collaborate for shared #business #success!

By: Thatcher

Thatcher — Wed, 17 Nov 2010 12:13:52 +0000

Love the end. We are elephants and BIG BUSINESS will eventually end of regretting their 90 and 120 day payment terms simply because the best talent will refuse to work for them. Or, the elephants will all die with vultures picking our bones. Hopefully, it won’t be the latter.

By: thatsawinner

thatsawinner — Wed, 17 Nov 2010 03:07:10 +0000

This is pretty much the same as an old saying I am quite fond of…. “If you owe the bank $100,000, that’s your problem. If you owe the bank $100,000,000, that’s their problem.”

By: doctorjay317

doctorjay317 — Wed, 17 Nov 2010 00:59:36 +0000

U.S.A. – the land of opportunities.

Yes, only if you are big enough.

By: JakeSigal

JakeSigal — Tue, 16 Nov 2010 21:15:45 +0000

We’ve seen this big time at Livio Radio with slow payments and it sucks!

I get it, why would they pay me when they don’t have to and know we’re not going to go after them. When supply is higher than demand, it makes it a lot easier to take advantage of the situation.

However breaking contract is still wrong.

By: saucymugwump

saucymugwump — Tue, 16 Nov 2010 19:29:41 +0000

What do you expect in a country where the US Chamber of Commerce, contrary to its name, represents only the largest corporations?

What do you expect from a Congress that represents mainly large, multinational corporations like Microsoft? Members of Congress often say that they are proponents of small business, but they are lying; small businesses do not donate anywhere near as much to election campaigns as do large, multinational corporations.

By: techbizceo

techbizceo — Tue, 16 Nov 2010 18:54:22 +0000

As a small business owner running a $2M+ a year business creating 20 jobs in NC, this hits very close to home. Small businesses can appear very healthy on a P&L and still fight to make payroll because of delinquent payments. We service several Fortune 1000 companies and provide national services at our expense. We have agreements with Net 30 day terms for payment and still have to make collections calls into accounts that are 30-60-90 days past those terms. There’s really nothing we can do. If we threaten to stop work or prepare finance charges, we risk losing all the business altogether. There’s even the realized risk of being sued by Goliath for not completing a project, even if they haven’t made progress payments in 6 months. They know that expense is very damaging to a small business and use it to their advantage. It’s sad really.

By: tonydd

tonydd — Tue, 16 Nov 2010 18:31:50 +0000

This is not a huge surprise in terms of the relationship between economic growth / contraction and the velocity of money.

This produces the effect of less money apparent in the system, and this is a real economy effect so it has the possibility to feed upon itself.

Another factor is that this is one of the hidden locations of inflation. It remains here as an unrealised cost to the end user, waiting until it can wait no more.